Will a Bankruptcy Close Margaritaville in Times Square?
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Margaritaville Times Square, the Jimmy Buffet-themed resort with five bars, an outdoor pool, and a two-story Statue of Liberty in one of its restaurants, filed for Chapter 11 bankruptcy on Sunday — a last-minute bid to stop a foreclosure auction scheduled for Monday. It’s the latest development in a saga that dates back to at least March, when the resort’s owner, Soho Properties, failed to pay a $57 million loan on the hotel.
There are more than 40 current and upcoming Margaritaville travel destinations worldwide, but only one in Times Square. Here are five things to know about the shake-up:
1. The Times Square hotel cost nearly $370 million to build
Margaritaville licenses its name and intellectual property to different companies that operate resorts, hotels, and casinos under its name. The location in Times Square opened in 2021 but it had been in the works since at least 2017. It cost nearly $370 million to open and includes five bars, an outdoor pool, 230 rooms, and a giant Statue of Liberty that serves as a backdrop for a light show with a dancing margarita.
2. Margaritaville will stay open through the bankruptcy
Sharif El-Gamal, the chairman of Soho Properties, the real estate developer that licensed the Margaritaville name to open the resort, has filed for Chapter 11 bankruptcy, a financial option that allows businesses to remain open, sometimes under the same owners, in order to restructure and become profitable. Reservations at the resort were briefly unavailable last week, but bookings can once again be made through its website. Its outdoor pool, the only one located in Times Square, is back open, too.
3. The high-profile drama dates back months
Arden Group, the real estate firm based in Philadelphia that owns the property, moved to foreclose the resort in March after Soho Properties failed to pay a $57 million loan. A foreclosure auction was scheduled for July 10. Ahead of the auction, Soho Properties filed a lawsuit to stop the property from being foreclosed but failed to convince a judge in Manhattan Supreme Court, according to Crain’s New York Business.
4. The resort blames the bankruptcy on the pandemic
“The COVID pandemic, followed by rising interest rates, has created a one-two punch that has greatly impacted NYC’s hotel owners,” Evan Laskin, the chief investment officer at Margaritaville Resort Times Square, told Eater in a statement over email. The resort is hoping to refinance $309 million in debt through its bankruptcy, according to Forbes.
5. Margaritaville thinks it can turn things around
Sethian Pomerantz, the executive vice president of Soho Properties, said in an interview with Bloomberg that he believes the resort can refinance its debt “in a reasonable period of time.” Its revenues should surpass $25 million by the end of 2024, according to Pomerantz.
Source: Eater NY
